Question

Explain with reasons whether you 'agree' or 'disagree' with the following statement:
Law of Diminishing Marginal Utility is important in practice.

Answer 1

Law of diminishing marginal utility states that as the consumption of a commodity rises, marginal utility tends to fall. It is known as the fundamental psychological law. It is important in practice since it is applied to the theory of value. It also helps to determine the law of demand and law of supply.